What Is The PSC Register? Person Of Significant Control
A Person with Significant Control (PSC) is someone who controls or owns a company.
To be a PSC you must meet one or more of the following conditions of control in relation to a company:
- Directly or indirectly holding more than 25% of the shares.
- Directly or indirectly holding more than 25% of the voting rights.
- Directly or indirectly holding the right to appoint or remove the majority of directors.
- Otherwise having the right to exercise, or actually exercising, significant influence or control.
- Having the right to exercise, or actually exercising, significant influence or control over the activities of a trust or firm which is not a legal entity but would itself satisfy any of the first four conditions if it were an individual.
In the fourth and fifth conditions of control, a person with “Control” and “influence” can be defined as someone who:
- Directs the activities of a company.
- Can ensure that a company mostly adopts the activities that they put forward.
- Has decision rights over decisions related to the running of the business. For example, decisions relating to adopting the business plan, appointment or removal of the CEO and establishing incentive schemes for employees.
- Has veto rights over decisions related to the running of the business such as amending the business plan or making additional borrowing from lenders.
- Has veto rights over the appointment of most directors – those directors who hold a majority of the voting rights at meetings of the board on all or most matters.
- Is not a member of the board of directors but consistently or regularly directs or influences a significant section of the board or is regularly consulted on board decisions and whose views influence decisions made by the board.
- Is a company founder who no longer has a significant shareholding in the company they started but makes recommendations to the other shareholders on how to vote and those recommendations are always or mostly followed.
HMRC must be informed of the PSC of a company and the details of the PSC must be recorded on the company’s PSC register at companies house online. It is therefore important to try to identify and contact anyone who may be a PSC of your company. They are committing a criminal offence if they refuse to provide PSC information.
The following information needs to be confirmed with the PSC and recorded in the PSC register:
- Date of birth
- Country of residence
- Service address
- Usual residential address (not displayed to the public)
- The date they became a PSC of the company
- The date they were entered into the PSC register.
- Which conditions of control are met
- The level of their shares and voting rights, within the following categories:
- Over 25% up to (and including) 50%
- More than 50% and less than 75%
- 75% or more.
All PSC information is available to the public except their home address and the day of their date of birth.
The requirement to keep a PSC register was introduced on 6th April 2016. As of 30th June 2016, companies must submit the information held on their PSC register to the central public register at Companies House when filing their annual confirmation statement. The purpose of the PSC register is to improve corporate transparency and trust in the UK by making it clear to enforcement agencies, other businesses and the general public who owns and controls companies in the UK.
If your PSC information changes, you must inform HMRC as soon as possible and update your company’s PSC register. For example, if the details of an existing PSC change, a new PSC is appointed, or someone is no longer a PSC, HMRC must be notified.
For advice on completing your PSC register and any company secretarial work, please do not hesitate to get in touch.